NEW YORK — The Federal Reserve Bank of New York today announced the formation of the Treasury Market Practices Group (TMPG). The role of this private-sector group is to strengthen market integrity by promotion of best practices in the Treasury market. The TMPG, currently composed of representatives from dealers, buy-side firms and custodians in the Treasury market, was formed to encourage dialogue and offer recommendations for practices in the Treasury cash, repo and related markets.
Today, the TMPG made available for review "Treasury Market Best Practices," a preliminary compilation of recommended practices to promote trading integrity and market efficiency. The TMPG is soliciting broader industry and public feedback before publishing final recommendations.
In the November 6 meeting with primary dealers, in subsequent dialogue with other industry participants and by sponsorship of the TMPG, the New York Fed has emphasized the importance of the integrity of the Treasury market, which is vital to maintaining its status as the deepest and most liquid sovereign debt market in the world. As sponsor, the New York Fed will facilitate and support the work of the TMPG.
Among the recommendations aimed at supporting market integrity, the TMPG advocates integrating compliance and trading functions in a meaningful fashion, evaluating large trading positions carefully to avoid adverse affects on market liquidity and clearing trades efficiently.